Federal member for Bendigo Lisa Chesters has called on the federal government to extend its coronavirus supplement and raise the base JobSeeker rate.
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The government's coronavirus supplement is due to end on September 24.
The $550 fortnightly payment is in addition to the $565.70 JobSeeker payment, formerly known as the Newstart Allowance.
Ms Chesters said the coronavirus pandemic has hurt the Victorian economy, which isn't rebounding as others are.
"The government has significantly underspent on the JobKeeper program and we know there is money there," Ms Chesters said.
"This is a situation where the government can be more generous and they need to be to keep local economies afloat."
"You need governments to do the heavy lifting in times of crisis."
Bendigo resident Sharron Jamisson fears she could face homelessness again if the government doesn't increase the JobSeeker rate.
Ms Jamisson credits the coronavirus supplement for making her job ready and gaining temporary employment at a medical centre.
"Having financial security made me less anxious and worried that I won't have somewhere to live," Ms Jamisson said.
After losing her house and selling most of her belongings following the death of her husband in 2017, Ms Jamisson was nearly without a fixed address.
"I purchased a trailer and was thinking about getting a dog for security if I was going to have to sleep in my car," she said.
The prospect of homelessness was real for the 62-year-old, who has called Bendigo home for 30 years.
Ms Jamisson was able to secure accommodation in affordable housing and said the coronavirus supplement has given her hope.
"All of the sudden I could pay all of my bills and afford to eat and felt this incredible relief," Ms Jamisson said.
"What I realise from all of this is how much a secure roof and proper income has helped me feel that I could take on employment and get a job," she said.
Shadow minister for families and social services Linda Burney said there are 12 Australians on unemployment payments for every one job vacancy.
"The Prime Minister suggested on Sydney radio that Australians receiving unemployment payments weer doing so by choice," Ms Burney said.
"To suggest this is widespread is to have your head in the sand."
"The base rate of JobSeeker was too low before coronavirus and it was a barrier to getting a job and was pushing people into poverty."
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